FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

   (X)           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT of 1934

For the quarterly period ended                       September 30, 2003
                                          --------------------------------------

                                       OR

   ( )           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT of 1934

For the transition period from _________________________ to ____________________


                             Commission file number
                                     0-21560
                     ---------------------------------------


                            CNL Income Fund XI, Ltd.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


        Florida                                          59-3078854
------------------------------------            --------------------------------
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                         Identification No.)


450 South Orange Avenue
Orlando, Florida                                            32801
------------------------------------            --------------------------------
      (Address of principal executive offices)            (Zip Code)


Registrant's telephone number
(including area code)                                (407) 540-2000
                                                --------------------------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  13 or 15(d)  of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes X No ____

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act): Yes___ No X
<PAGE>


                                    CONTENTS





                                                                        Page
Part I.

     Item 1. Financial Statements:

                 Condensed Balance Sheets                               1

                 Condensed Statements of Income                         2

                 Condensed Statements of Partners' Capital              3

                 Condensed Statements of Cash Flows                     4

                 Notes to Condensed Financial Statements                5-7

     Item 2.  Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                    8-11

     Item 3.  Quantitative and Qualitative Disclosures About
                 Market Risk                                           11

     Item 4.  Controls and Procedures                                  11-12

Part II.

     Other Information                                                 13-14


<PAGE>





                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                            CONDENSED BALANCE SHEETS

<TABLE>

                                                                          September 30,             December 31,
                                                                              2003                      2002
                                                                        ------------------       -------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                             ASSETS

Real estate properties with operating leases, net                           $  19,012,726             $  18,657,306
Net investment in direct financing leases                                       5,183,378                 5,966,657
Real estate held for sale                                                         960,000                 1,573,394
Investment in joint ventures                                                    4,365,927                 4,414,071
Cash and cash equivalents                                                       2,690,877                 1,763,878
Receivables, less allowance for doubtful accounts of
   $160,830 and $23,196, respectively                                                  --                   230,688
Accrued rental income                                                           1,470,752                 1,578,282
Other assets                                                                      143,569                   135,940
                                                                        ------------------       -------------------

                                                                            $  33,827,229             $  34,320,216
                                                                        ==================       ===================

               LIABILITIES AND PARTNERS' CAPITAL

Accounts payable and accrued expenses                                        $     10,520               $     3,271
Real estate taxes payable                                                          32,078                    15,632
Distributions payable                                                             875,006                 1,075,006
Due to related parties                                                             21,536                    20,101
Rents paid in advance and deposits                                                164,434                   163,020
                                                                        ------------------       -------------------
    Total liabilities                                                           1,103,574                 1,277,030

Minority interests                                                                501,079                   507,991

Partners' capital                                                              32,222,576                32,535,195
                                                                        ------------------       -------------------

                                                                            $  33,827,229             $  34,320,216
                                                                        ==================       ===================

</TABLE>
           See accompanying notes to condensed financial statements.
<PAGE>


                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                         CONDENSED STATEMENTS OF INCOME

<TABLE>

                                                            Quarter Ended                    Nine Months Ended
                                                            September 30,                      September 30,
                                                        2003             2002              2003              2002
                                                    -------------    --------------  -----------------  ---------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Revenues:
    Rental income from operating leases                $ 593,535        $  591,911       $  1,715,543      $ 1,767,460
    Earned income from direct financing leases           161,356           200,688            523,836          588,569
    Contingent rental income                              15,933            50,699             18,764           79,404
    Interest and other income                              1,019             5,422              9,329           14,915
                                                    -------------    --------------  -----------------  ---------------
                                                         771,843           848,720          2,267,472        2,450,348
                                                    -------------    --------------  -----------------  ---------------
Expenses:
    General operating and administrative                  56,960            66,484            195,310          219,948
    Property related                                      18,330             9,145             35,712           67,727
    Management fees to related parties                     9,118             8,224             28,608           32,158
    State and other taxes                                  1,466                --             33,820           31,779
    Depreciation                                         102,948            92,039            300,516          290,097
    Provision for write-down of assets                        --                --             67,693               --
                                                    -------------    --------------  -----------------  ---------------
                                                         188,822           175,892            661,659          641,709
                                                    -------------    --------------  -----------------  ---------------

Income Before Minority Interests in Income of
    Consolidated Joint Ventures and Equity in
    Earnings of Unconsolidated Joint Ventures            583,021           672,828          1,605,813        1,808,639

Minority Interests in Income of Consolidated
    Joint Ventures                                       (11,476 )         (14,985 )          (40,607 )        (48,426 )

Equity in Earnings of Unconsolidated Joint
    Ventures                                             110,325           118,993            320,819          760,851
                                                    -------------    --------------  -----------------  ---------------

Income from Continuing Operations                        681,870           776,836          1,886,025        2,521,064
                                                    -------------    --------------  -----------------  ---------------

Discontinued Operations:
    Income (loss) from discontinued operations           (19,311 )          52,726             48,413          415,093
    Gain on disposal of discontinued operations               --                --            377,961          442,146
                                                    -------------    --------------  -----------------  ---------------
                                                         (19,311 )          52,726            426,374          857,239
                                                    -------------    --------------  -----------------  ---------------

Net Income                                             $ 662,559        $  829,562       $  2,312,399      $ 3,378,303
                                                    =============    ==============  =================  ===============

Income Per Limited Partner Unit:
    Continuing Operations                               $   0.17         $    0.19         $     0.47        $    0.63
    Discontinued Operations                                   --              0.02               0.11             0.21
                                                    -------------    --------------  -----------------  ---------------

                                                        $   0.17         $    0.21         $     0.58        $    0.84
                                                    =============    ==============  =================  ===============

Weighted Average Number of Limited Partner
    Units Outstanding                                  4,000,000         4,000,000          4,000,000        4,000,000
                                                    =============    ==============  =================  ===============
</TABLE>
           See accompanying notes to condensed financial statements.
<PAGE>

                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                    CONDENSED STATEMENTS OF PARTNERS' CAPITAL

<TABLE>

                                                                          Nine Months Ended          Year Ended
                                                                            September 30,           December 31,
                                                                                 2003                   2002
                                                                         ---------------------    ------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

General partners:
    Beginning balance                                                          $      242,465          $    242,465
    Net income                                                                             --                    --
                                                                         ---------------------    ------------------
                                                                                      242,465               242,465
                                                                         ---------------------    ------------------
Limited partners:
    Beginning balance                                                              32,292,730            31,678,628
    Net income                                                                      2,312,399             4,314,126
    Distributions ($0.66 and $0.93 per
       limited partner unit, respectively)                                         (2,625,018 )          (3,700,024 )
                                                                         ---------------------    ------------------
                                                                                   31,980,111            32,292,730
                                                                         ---------------------    ------------------

Total partners' capital                                                       $    32,222,576         $  32,535,195
                                                                         =====================    ==================
</TABLE>
           See accompanying notes to condensed financial statements.
<PAGE>



                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>

                                                                                       Nine Months Ended
                                                                                         September 30,
                                                                                    2003               2002
                                                                               ---------------    ---------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Net Cash Provided by Operating Activities                                        $  2,867,678        $ 3,225,494
                                                                               ---------------    ---------------
Cash Flows from Investing Activities:
       Proceeds from sale of assets                                                   931,858          1,734,373
       Investment in joint ventures                                                        --         (1,839,798 )
       Redemption of certificates of deposit                                               --            211,587
                                                                               ---------------    ---------------
              Net cash provided by investing activities                               931,858            106,162
                                                                               ---------------    ---------------
Cash Flows from Financing Activities:
       Distributions to limited partners                                           (2,825,018 )       (2,625,018 )
       Distributions to holders of minority interests                                 (47,519 )          (51,133 )
                                                                               ---------------    ---------------
              Net cash used in financing activities                                (2,872,537 )       (2,676,151 )
                                                                               ---------------    ---------------

Net Increase in Cash and Cash Equivalents                                             926,999            655,505

Cash and Cash Equivalents at Beginning of Period                                    1,763,878            993,402
                                                                               ---------------    ---------------

Cash and Cash Equivalents at End of Period                                       $  2,690,877        $ 1,648,907
                                                                               ===============    ===============

Supplemental Schedule of Non-Cash Financing
    Activities:

       Distributions declared and unpaid at end of period                         $   875,006         $  875,006
                                                                               ===============    ===============
</TABLE>
           See accompanying notes to condensed financial statements.
<PAGE>



                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
           Quarters and Nine Months Ended September 30, 2003 and 2002


1.   Basis of Presentation

     The  accompanying   unaudited  condensed  financial  statements  have  been
     prepared  in  accordance  with  the  instructions  to Form  10-Q and do not
     include all of the information and note  disclosures  required by generally
     accepted  accounting  principles.  The  financial  statements  reflect  all
     adjustments,  consisting of normal recurring adjustments, which are, in the
     opinion of the general  partners,  necessary  for a fair  statement  of the
     results  for the  interim  periods  presented.  Operating  results  for the
     quarter and nine months ended  September  30, 2003 may not be indicative of
     the results  that may be expected  for the year ending  December  31, 2003.
     Amounts as of December 31, 2002, included in the financial statements, have
     been derived from audited financial statements as of that date.

     These unaudited financial statements should be read in conjunction with the
     financial  statements and notes thereto included in Form 10-K of CNL Income
     Fund XI, Ltd. (the "Partnership") for the year ended December 31, 2002.

     The  Partnership  accounts for its 85% interest in Denver Joint Venture and
     its 77.33%  interest in CNL/Airport  Joint Venture using the  consolidation
     method.  Minority interests  represent the minority joint venture partners'
     proportionate  share of the equity in the Partnership's  consolidated joint
     ventures. All significant  intercompany accounts and transactions have been
     eliminated.

     In January 2003, the Financial  Accounting  Standards Board ("FASB") issued
     FASB Interpretation No. 46 ("FIN 46"),  "Consolidation of Variable Interest
     Entities" to expand upon and strengthen  existing  accounting guidance that
     addresses  when a  company  should  include  the  assets,  liabilities  and
     activities  of  another  entity in its  financial  statements.  To  improve
     financial  reporting by companies  involved with variable interest entities
     (more commonly referred to as special-purpose entities or off-balance sheet
     structures),   FIN  46  requires  that  a  variable   interest   entity  be
     consolidated  by a company if that company is subject to a majority risk of
     loss from the variable interest entity's  activities or entitled to receive
     a majority of the  entity's  residual  returns or both.  Prior to FIN 46, a
     company  generally  included another entity in its  consolidated  financial
     statements only if it controlled the entity through voting  interests.  The
     consolidation requirements of FIN 46 apply immediately to variable interest
     entities  created after  January 31, 2003,  and to older  entities,  in the
     first fiscal year or interim  period  ending after  December 15, 2003.  The
     general  partners  believe  adoption of this  standard may result in either
     consolidation or additional  disclosure  requirements of the  Partnership's
     unconsolidated joint ventures,  which are currently accounted for under the
     equity method. However, such consolidation is not expected to significantly
     impact the Partnership's results of operations.

     In May 2003,  the FASB  issued FASB  Statement  No.  150,  "Accounting  for
     Certain Financial  Instruments with Characteristics of both Liabilities and
     Equity"  ("FAS  150").  FAS 150  establishes  standards  for how an  issuer
     classifies and measures certain financial  instruments with characteristics
     of both  liabilities  and equity.  FAS 150 will require issuers to classify
     certain   financial   instruments  as   liabilities   (or  assets  in  some
     circumstances)  that previously were classified as equity.  One requirement
     of FAS 150 is that  minority  interests  for  majority  owned  finite lived
     entities be  classified  as a liability  and recorded at fair market value.
     FAS 150 initially applied immediately to all financial  instruments entered
     into or modified  after May 31, 2003,  and  otherwise  was effective at the
     beginning  of the first  interim  period  beginning  after  June 15,  2003.
     Effective October 29, 2003, the FASB deferred  implementation of FAS 150 as
     it applies to minority interests of finite lived Partnerships. The deferral
     of these  provisions is expected to remain in effect while these  interests
     are  addressed  in either  Phase II of the  FASB's  Liabilities  and Equity
     project or Phase II of the FASB's Business Combinations project; therefore,
     no specific  timing for the  implementation  of these  provisions  has been
     stated.  The  implementation of the currently  effective aspects of FAS 150
     did not have an impact on the  Partnership's  results  of  operations.  The
     implementation  of the provisions of FAS 150 that have been deferred is not
     expected  to  have a  material  impact  on  the  Partnership's  results  of
     operations.


<PAGE>

                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
           Quarters and Nine Months Ended September 30, 2003 and 2002


2.   Reclassification

     Certain  items  in  the  prior  year's   financial   statements  have  been
     reclassified to conform to 2003 presentation.  These  reclassifications had
     no effect on total partners' capital or net income.

3.   Net Investment in Direct Financing Leases

     During the nine months ended September 30, 2003, the Partnership recorded a
     provision for write-down of assets of approximately $67,700 relating to the
     property in Yelm,  Washington.  The provision  represented  the  difference
     between the net  carrying  value of the  property  and its  estimated  fair
     value. The tenant of this property experienced financial difficulties,  and
     in March 2003, the Partnership executed a termination of the tenant's lease
     rights,  and  the  tenant  surrendered  the  premises.  As  a  result,  the
     Partnership reclassified this property from direct financing leases to real
     estate properties with operating  leases.  No loss on the  reclassification
     was recorded.

4.   Discontinued Operations

     During 2002, the  Partnership  identified and sold two properties that were
     classified  as  Discontinued   Operations  in  the  accompanying  financial
     statements. During 2003, the Partnership identified for sale two additional
     properties  that were also  classified  as  Discontinued  Operations in the
     accompanying financial statements.  In March 2003, the Partnership sold the
     property  in  Abilene,  Texas,  to the  tenant and  received  approximately
     $931,900 in net sales  proceeds,  resulting in a gain on disposal of assets
     of approximately $378,000. The Partnership reclassified the assets relating
     to the Property in  Lynchburg,  Virginia to real estate held for sale.  The
     reclassified asset was recorded at the lower of its carrying amount or fair
     value,  less cost to sell,  which resulted in the  Partnership  recording a
     provision for  write-down  of assets of  approximately  $41,200  during the
     quarter and nine months ended September 30, 2003. The provision represented
     the  difference  between the net  carrying  value of the  property  and its
     estimated fair value.

     The operating  results of the discontinued  operations for these properties
     are as follows:
<TABLE>

                                                          Quarter Ended                 Nine Months Ended
                                                          September 30,                   September 30,
                                                       2003             2002           2003           2002
                                                  ---------------   -------------  -------------  -------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

          Rental revenues                             $   27,604        $ 52,259      $ 100,013      $ 386,643
          Other income                                       538             570            538         40,326
          Expenses                                        (6,298 )          (103 )      (10,983 )      (11,876 )
          Provision for write-down of assets             (41,155 )            --        (41,155 )           --
                                                  ---------------   -------------  -------------  -------------
          Income (loss) from discontinued
               operations                            $   (19,311 )      $ 52,726      $  48,413      $ 415,093
                                                  ===============   =============  =============  =============
</TABLE>
<PAGE>



                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
           Quarters and Nine Months Ended September 30, 2003 and 2002


5.   Concentration of Credit Risk - Continued

     The following  schedule  presents  total rental  revenues  from  individual
     lessees,  each  representing  more  than ten  percent  of  rental  revenues
     (including   the   Partnership's   share  of  rental   revenues   from  the
     unconsolidated  joint ventures and the properties held as tenants-in-common
     with  affiliates  of the general  partners),  for each of the periods ended
     September 30:
<TABLE>

                                                                             2003               2002
                                                                         --------------    ---------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                 Jack in the Box Inc. and Jack in the Box Eastern
                      Division, L.P.                                         $ 576,056          $ 576,056
                 Golden Corral Corporation                                     353,149            350,465
                 Denny's, Inc. and Denny's Corporation                         336,718            341,575
                 Texas Taco Cabana, LP                                         304,716                N/A
                 Burger King Corporation and BK Acquisition,
                      Inc.                                                         N/A            383,883
</TABLE>

     In addition,  the following  schedule  presents total rental  revenues from
     individual  restaurant  chains,  each representing more than ten percent of
     rental revenues  (including the Partnership's share of rental revenues from
     the   unconsolidated   joint   ventures   and   the   properties   held  as
     tenants-in-common with affiliates of the general partners), for each of the
     periods ended September 30:
<TABLE>

                                                                             2003               2002
                                                                         --------------    ---------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                 Jack in the Box                                             $ 576,056          $ 576,056
                 Burger King                                                   475,983            738,170
                 Denny's                                                       459,428            719,210
                 Golden Corral Family Steakhouse Restaurants                   353,149            350,465
                 Taco Cabana                                                   304,716                N/A
</TABLE>

     The  information  denoted by N/A indicates that for each period  presented,
     the tenant or group of affiliated tenants,  and the chain did not represent
     more than ten percent of the Partnership's total rental revenues.

     Although the Partnership's  properties have some geographical  diversity in
     the  United  States  and the  Partnership's  lessees  operate a variety  of
     restaurant  concepts,  default by any of these lessees or restaurant chains
     will  significantly  impact the results of operations of the Partnership if
     the Partnership is not able to re-lease the properties in a timely manner.

<PAGE>



ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

        CNL  Income  Fund XI,  Ltd.  (the  "Partnership")  is a Florida  limited
partnership  that was  organized on August 20, 1991 to acquire for cash,  either
directly or through  joint  venture  arrangements,  both newly  constructed  and
existing  restaurants,  as well as properties upon which  restaurants were to be
constructed  (the  "Properties"),  which are leased  primarily  to  operators of
national and regional  fast-food and family-style  restaurant chains. The leases
are, in general, triple-net leases, with the lessees responsible for all repairs
and maintenance,  property taxes, insurance,  and utilities. As of September 30,
2002,  the  Partnership  owned  32  Properties  directly  and  eight  Properties
indirectly  through  joint  venture  or tenancy  in common  arrangements.  As of
September  30, 2003,  the  Partnership  owned 31  Properties  directly and eight
Properties indirectly through joint venture or tenancy in common arrangements.

Capital Resources

        Cash from operating  activities was $2,867,678 for the nine months ended
September 30, 2003,  as compared to  $3,225,494  during the same period of 2002.
The  decrease  in cash  from  operating  activities  for the nine  months  ended
September  30,  2003,  was a result of changes in the  Partnership's  income and
expenses.  Other sources and uses of cash included the following during the nine
months ended September 30, 2003.

        In March 2003, the  Partnership  sold its Property in Abilene,  Texas to
the tenant and received net sales proceeds of approximately $931,900,  resulting
in a gain of approximately  $378,000.  The Partnership intends to reinvest these
proceeds in an additional Property.

        At September 30, 2003, the  Partnership  had $2,690,877 in cash and cash
equivalents,  as compared to  $1,763,878  at December 31, 2002. At September 30,
2003,  these funds were primarily held in demand deposit  accounts at commercial
banks.  The increase in cash and cash  equivalents  at September  30, 2003 was a
result of the Partnership holding the net proceeds from the sale of the Property
in Abilene,  Texas pending  reinvestment  in an additional  Property.  The funds
remaining  at September  30,  2003,  after  payment of  distributions  and other
liabilities  will be used to invest in an  additional  Property  and to meet the
Partnership's working capital needs.

Short-Term Liquidity

        The Partnership's  investment strategy of acquiring  Properties for cash
and  leasing  them  under  triple-net  leases to  operators  who meet  specified
financial standards minimizes the Partnership's  operating expenses. The general
partners  believe  that the  leases  will  generate  net cash  flow in excess of
operating expenses.

        The Partnership's short-term liquidity requirements consist primarily of
the operating expenses of the Partnership.

        The general  partners have the right,  but not the  obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the Partnership's operations.

        The Partnership  generally  distributes  cash from operations  remaining
after the payment of operating  expenses of the Partnership,  to the extent that
the general partners  determine that such funds are available for  distribution.
Based on current cash from operations, the Partnership declared distributions to
limited  partners of $2,625,018 for each of the nine months ended  September 30,
2003 and 2002  ($875,006 for each of the quarters  ended  September 30, 2003 and
2002).  This  represents  distributions  of $0.66  per unit for each of the nine
months  ended  September  30, 2003 and 2002 ($0.22 per unit for each  applicable
quarter). No distributions were made to the general partners for the nine months
ended  September  30,  2003 and 2002.  No  amounts  distributed  to the  limited
partners for the nine months ended  September  30, 2003 and 2002 are required to
be or have been treated by the  Partnership  as a return of capital for purposes
of  calculating  the  limited   partners'   return  on  their  adjusted  capital
contributions. The Partnership intends to continue to make distributions of cash
available for distribution to the limited partners on a quarterly basis.
<PAGE>

        Total liabilities,  including  distributions payable, were $1,103,574 at
September 30, 2003, as compared to $1,277,030 at December 31, 2002. The decrease
in  total  liabilities  was  primarily  a result  of the  payment  of a  special
distribution to the limited  partners during the nine months ended September 30,
2003,  which was accrued at December  31,  2002.  The  special  distribution  of
$200,000  represented  accumulated,   excess  operating  reserves.  The  general
partners  believe that the  Partnership  has sufficient cash on hand to meet its
current working capital needs.

Long Term Liquidity

        The  Partnership  has no  long-term  debt or other  long-term  liquidity
requirements.

Results of Operations

        Total  rental  revenues  were  $2,239,379  for  the  nine  months  ended
September 30, 2003,  as compared to  $2,356,029  during the same period of 2002,
$754,891 and $792,599 of which were earned during the third quarters of 2003 and
2002,  respectively.  Rental  revenues  were lower  during the  quarter and nine
months  ended  September  30,  2003,  as compared  to the same  periods of 2002,
because the Partnership  provided a rent reduction to the tenant of the Property
in Yelm, Washington when the tenant experienced financial  difficulties in 2002.
In March 2003,  the  Partnership  executed a termination  of the tenant's  lease
rights, and the tenant surrendered the premises. The restaurant has continued to
operate  under  a  temporary  lease  agreement  with  a  new  tenant  until  the
negotiations for a new contract with this lessee are finalized.  The Partnership
expects that the new tenant will continue to operate as a Burger King with lease
terms substantially the same as the Partnership's other leases.

        Rental  revenues were also lower during the nine months ended  September
30, 2003, because the Partnership  stopped recording rental revenues relating to
the Property in Dayton, Ohio when the tenant experienced financial difficulties.
During the third quarter of 2003,  the  Partnership  collected and recognized as
revenues a portion of these past due rents.  In addition,  Denver Joint Venture,
in which  the  Partnership  owns an 85%  interest  and  accounts  for  under the
consolidation  method, also stopped recording rental revenues because the tenant
of the Property owned by this joint venture experienced financial difficulties.

        In April 2003, a tenant, The Melodie Corporation,  filed for bankruptcy.
The tenant  has  neither  affirmed  nor  rejected  the one lease it has with the
Partnership. Subsequent to the tenant filing for bankruptcy, the Partnership has
continued receiving rental payments relating to this lease.

        The Partnership and its consolidated joint ventures also earned $18,764,
in  contingent  rental  income  during the nine months  ended  September  30, as
compared to $79,404 during the same period of 2002, $15,933 and $50,699 of which
were  earned  during  the third  quarters  of 2003 and 2002,  respectively.  The
decrease in  contingent  rental  income during the quarter and nine months ended
September  30,  2003,  as  compared  to the same  periods of 2002,  was due to a
reduction in the reported gross sales of the restaurants as compared to the same
period in 2002. The decrease in contingent  rental income during the quarter and
nine months ended September 30, 2003, was also due to the Partnership  recording
lower  contingent  rental income relating to the Properties in Dayton,  Ohio and
Roswell, New Mexico, whose tenants experienced financial difficulties.

        During  the  nine  months  ended   September  30,  2003  and  2002,  the
Partnership  earned  $320,819 and $760,851,  respectively,  attributable  to net
income earned by unconsolidated  joint ventures,  $110,325 and $118,993 of which
were earned during the third quarters of 2003 and 2002, respectively. Net income
earned by unconsolidated  joint ventures was higher during the nine months ended
September 30, 2002 partially  because in June 2002,  Ashland Joint  Venture,  in
which the Partnership owns a 62.16% interest,  sold its Property in Ashland, New
Hampshire,  to the tenant and recognized a gain of approximately  $500,900.  The
Partnership  recognized its pro-rata share of this gain as equity in earnings of
joint  ventures.  The joint  venture  reinvested  the  majority of the net sales
proceeds from this sale in a Property in San Antonio, Texas.

        Net income  earned by  unconsolidated  joint  ventures  was also  higher
during  the  nine  months  ended  September  30,  2002  partially   because  the
Partnership  and an affiliate  of the general  partners,  as  tenants-in-common,
collected and  recognized as income  approximately  $307,700 in past due amounts
relating to the Property in Corpus  Christie,  Texas that was formerly leased by
Phoenix  Restaurant Group, Inc. ("PRG").  The Partnership owns a 73% interest in
this  Property.  In October 2001,  PRG filed for  bankruptcy.  During 2002,  the
bankruptcy court
<PAGE>


assigned this lease to a new tenant and all other lease terms remained the same.
The new tenant is a Delaware limited  liability  company and an affiliate of the
general partners.

     The decrease in net income earned by  unconsolidated  joint ventures during
the nine months ended September 30, 2003 was partially offset by the Partnership
reinvesting  in June 2002 the majority of the net sales  proceeds from the sales
of  the  Properties  in  Columbus,  Ohio  and  East  Detroit,  Michigan,  in two
Properties, one in Universal City and the other in Schertz, Texas. Each Property
is held as a separate  tenancy-in-common  arrangement  with CNL Income  Fund VI,
Ltd., a Florida limited partnership and affiliate of the general partners.

     During the nine months ended September 30, 2003, four lessees (or groups of
affiliated lessees) of the Partnership and its consolidated joint ventures,  (i)
Jack in the Box Inc.  and Jack in the Box  Eastern  Division,  L.P.  (which  are
affiliated entities under common control)  (hereinafter  referred to as "Jack in
the Box Inc."), (ii) Golden Corral Corporation,  (iii) Denny's, Inc. and Denny's
Corporation  (which are affiliated  entities under common control)  (hereinafter
referred  to  as  "Denny's,  Inc."),  and  (iv)  Texas  Taco  Cabana,  LP,  each
contributed more than 10% of the Partnership's  total rental revenues (including
rental revenues from the  Partnership's  consolidated  joint  ventures,  and the
Partnership's  share of rental revenues from Properties owned by  unconsolidated
joint ventures and Properties  owned with affiliates of the general  partners as
tenants-in-common). It is anticipated that, based on the minimum rental payments
required by the leases,  these four  lessees (or groups of  affiliated  lessees)
each will continue to contribute more than 10% of the Partnership's total rental
revenues.  In addition  during the nine months ended  September  30, 2003,  five
restaurant chains, Jack in the Box, Burger King,  Denny's,  Golden Corral Family
Steakhouse  Restaurants  ("Golden Corral"),  and Taco Cabana, each accounted for
more than 10% of the  Partnership's  total  rental  revenues  (including  rental
revenues  from  the   Partnership's   consolidated   joint  ventures,   and  the
Partnership's  share of rental revenues from Properties owned by  unconsolidated
joint ventures and Properties  owned with affiliates of the general  partners as
tenants-in-common).  It is anticipated  that these five  restaurant  chains each
will  continue to account for more than 10% of the  Partnership's  total  rental
revenues to which the Partnership is entitled under the terms of the leases. Any
failure  of these  lessees  or  restaurant  chains  will  materially  affect the
Partnership's  results of operations if the  Partnership is not able to re-lease
the Properties in a timely manner.

     Operating expenses,  including depreciation and provision for write-down of
assets,  were $661,659 and $641,709 for the nine months ended September 30, 2003
and 2002, respectively,  $188,822 and $175,892 of which were incurred during the
third  quarters  of 2003 and  2002,  respectively.  The  increase  in  operating
expenses  during the nine  months  ended  September  30,  2003 was caused by the
Partnership  recording a provision  for  write-down  of assets of  approximately
$67,700 relating to the Property in Yelm, Washington.  The provision represented
the difference  between the net carrying value of the Property and its estimated
fair value. The tenant of this Property experienced financial difficulties and a
new operator has continued to operate the Property under a temporary  agreement,
as described  above.  The increase in operating  expenses during the quarter and
nine months ended  September 30, 2003,  was also partially due to an increase in
depreciation  expense  relating to the Property in Yelm,  Washington.  The asset
relating  to this  Property  was  reclassified  from net  investment  in  direct
financing lease to real estate  properties with operating leases when the tenant
surrendered the premises in March 2003.

     The increase in operating  expenses  during the nine months ended September
30,  2003  was  partially  offset  by a  decrease  in  the  costs  incurred  for
administrative  expenses for servicing the  Partnership and its Properties and a
decrease in property  expenses,  such as legal fees, repairs and maintenance and
real  estate  taxes,  relating  to  tenants  who  were  experiencing   financial
difficulties.  Property  related  expenses  were higher  during 2002 because the
Partnership  elected to reimburse the tenant of the Properties in Oklahoma City,
Oklahoma and McAllen, Texas for certain renovation costs.

     During the year ended  December 31, 2002,  the  Partnership  identified and
sold two  Properties  that were  classified  as  Discontinued  Operations in the
accompanying  financial  statements.  In addition,  during 2003, the Partnership
identified for sale two additional Properties,  one in Abilene, Texas and one in
Lynchburg, Virginia, that were also classified as Discontinued Operations in the
accompanying  financial  statements.  In March 2003,  the  Partnership  sold the
Property in Abilene, Texas. As of November 7, 2003, the Partnership had not sold
the Property in Lynchburg,  Virginia. The Partnership reclassified this asset to
real estate held for sale. The  reclassified  asset was recorded at the lower of
its  carrying  amount or fair value,  less cost to sell,  which  resulted in the
Partnership  recording a provision  for  write-down  of assets of  approximately
$41,200  during the  quarter and nine  months  ended  September  30,  2003.  The
Partnership  recognized net rental income (rental revenues less Property related
<PAGE>

expenses and provision for write-down of assets) of $52,726 and $415,093  during
the quarter and nine months ended September 30, 2002, respectively,  relating to
these  Properties,  prior to the sales.  Rental  revenues  during 2002  included
because the Partnership received payment and recognized as income past due rents
of approximately $158,000 relating to the Property in Abilene,  Texas, which was
formerly leased by Phoenix Restaurant Group, Inc. ("PRG").  In October 2001, PRG
filed for bankruptcy  and the  Partnership  stopped  recording  rental  revenues
relating to this Property.  During 2002, the bankruptcy court assigned the lease
relating to this Property to a new tenant and all other lease terms remained the
same. In June 2002, the  Partnership  sold the Properties in Columbus,  Ohio and
East Detroit,  Michigan to the tenant  resulting in a gain on disposal of assets
of  approximately  $442,100.  The  Partnership  recognized  net rental income of
$48,413  during the nine  months  ended  September  30,  2003,  relating  to the
Properties  in  Abilene,  Texas and  Lynchburg,  Virginia.  In March  2003,  the
Partnership sold the Property in Abilene, Texas, resulting in a gain on disposal
of assets of  approximately  $378,000.  The Partnership  recognized a net rental
loss of $19,311  during the quarter ended  September  30, 2003,  relating to the
Property  in  Lynchburg,  Virginia.  The net  rental  loss was a  result  of the
Partnership recording a provision for write-down of assets, as described above.

     In January 2003, the Financial  Accounting  Standards Board ("FASB") issued
FASB  Interpretation  No. 46 ("FIN 46"),  "Consolidation  of  Variable  Interest
Entities"  to expand  upon and  strengthen  existing  accounting  guidance  that
addresses when a company should include the assets,  liabilities  and activities
of another entity in its financial statements. To improve financial reporting by
companies involved with variable interest entities (more commonly referred to as
special-purpose entities or off-balance sheet structures),  FIN 46 requires that
a variable  interest  entity be  consolidated  by a company  if that  company is
subject  to a  majority  risk  of  loss  from  the  variable  interest  entity's
activities or entitled to receive a majority of the entity's residual returns or
both.  Prior to FIN 46, a  company  generally  included  another  entity  in its
consolidated  financial  statements  only if it  controlled  the entity  through
voting interests. The consolidation  requirements of FIN 46 apply immediately to
variable  interest  entities  created  after  January  31,  2003,  and to  older
entities,  in the first fiscal year or interim  period ending after December 15,
2003.  The general  partners  believe  adoption of this  standard  may result in
either consolidation or additional disclosure  requirements of the Partnership's
unconsolidated  joint  ventures,  which are  currently  accounted  for under the
equity method.  However,  such  consolidation  is not expected to  significantly
impact the Partnership's results of operations.

     In May 2003,  the FASB  issued FASB  Statement  No.  150,  "Accounting  for
Certain  Financial  Instruments  with  Characteristics  of both  Liabilities and
Equity" ("FAS 150"). FAS 150 establishes  standards for how an issuer classifies
and  measures  certain  financial   instruments  with  characteristics  of  both
liabilities  and  equity.  FAS 150 will  require  issuers  to  classify  certain
financial  instruments as  liabilities  (or assets in some  circumstances)  that
previously  were  classified  as  equity.  One  requirement  of FAS  150 is that
minority  interests for majority  owned finite lived entities be classified as a
liability  and  recorded  at  fair  market  value.  FAS  150  initially  applied
immediately to all financial  instruments entered into or modified after May 31,
2003,  and otherwise was effective at the beginning of the first interim  period
beginning  after June 15, 2003.  Effective  October 29, 2003,  the FASB deferred
implementation  of FAS 150 as it applies to minority  interests  of finite lived
Partnerships.  The deferral of these  provisions is expected to remain in effect
while these interests are addressed in either Phase II of the FASB's Liabilities
and  Equity  project or Phase II of the FASB's  Business  Combinations  project;
therefore,  no specific timing for the  implementation  of these  provisions has
been stated.  The  implementation of the currently  effective aspects of FAS 150
did  not  have  an  impact  on the  Partnership's  results  of  operations.  The
implementation  of the  provisions  of FAS 150 that  have been  deferred  is not
expected to have a material impact on the Partnership's results of operations.

ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Not applicable.


ITEM 4.       CONTROLS AND PROCEDURES

         The  general  partners  maintain  a  set  of  disclosure  controls  and
procedures  designed to ensure that information  required to be disclosed in the
Partnership's  filings  under the  Securities  Exchange Act of 1934 is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange  Commission's  rules and forms. The principal  executive
and  financial  officers of the  corporate  general  partner have  evaluated the
Partnership's  disclosure  controls and  procedures  as of the end of the period
covered  by this  Quarterly  Report on Form 10-Q and have  determined  that such
disclosure controls and procedures are effective.

         There was no change in internal  control over financial  reporting that
occurred during the most recent fiscal quarter that has materially affected,  or
is  reasonably  likely to materially  affect,  internal  control over  financial
reporting.
<PAGE>

PART II.  OTHER INFORMATION


Item 1.   Legal Proceedings.   Inapplicable.

Item 2.   Changes in Securities.  Inapplicable.

Item 3.   Defaults upon Senior Securities.  Inapplicable.

Item 4.   Submission of Matters to a Vote of Security Holders.  Inapplicable.

Item 5.   Other Information.  Inapplicable.

Item 6.   Exhibits and Reports on Form 8-K.

          (a)  Exhibits

               3.1        Affidavit and  Certificate  of Limited  Partnership of
                          CNL Income Fund XI, Ltd.  (Included  as Exhibit 3.2 to
                          Registration  Statement No.  33-43278 on Form S-11 and
                          incorporated herein by reference.)

               4.1        Affidavit and  Certificate  of Limited  Partnership of
                          CNL Income Fund XI, Ltd.  (Included  as Exhibit 3.2 to
                          Registration  Statement No.  33-43278 on Form S-11 and
                          incorporated herein by reference.)

               4.2        Amended and Restated Agreement of Limited  Partnership
                          of CNL Income Fund XI, Ltd.  (Included  as Exhibit 4.2
                          to Form 10-K filed with the  Securities  and  Exchange
                          Commission on April 15, 1993, and incorporated  herein
                          by reference.)

               10.1       Management  Agreement between CNL Income Fund XI, Ltd.
                          and CNL Investment  Company  (Included as Exhibit 10.1
                          to Form 10-K filed with the  Securities  and  Exchange
                          Commission on April 15, 1993, and incorporated  herein
                          by reference.)

               10.2       Assignment of Management Agreement from CNL Investment
                          Company  to  CNL  Fund  Advisors,  Inc.  (Included  as
                          Exhibit  10.2 to Form 10-K filed  with the  Securities
                          and  Exchange   Commission  on  March  30,  1995,  and
                          incorporated herein by reference.)

               10.3       Assignment  of  Management  Agreement  from CNL Income
                          Fund  Advisors,   Inc.  to  CNL  Fund  Advisors,  Inc.
                          (Included  as Exhibit 10.3 to Form 10-K filed with the
                          Securities  and Exchange  Commission on April 1, 1996,
                          and incorporated herein by reference.)

               10.4       Assignment  of  Management  Agreement  from  CNL  Fund
                          Advisors,  Inc. to CNL APF Partners,  LP. (Included as
                          Exhibit  10.4 to Form 10-Q filed  with the  Securities
                          and  Exchange  Commission  on  August  14,  2001,  and
                          incorporated herein by reference.)

               10.5       Assignment  of  Management   Agreement  from  CNL  APF
                          Partners,  LP to CNL Restaurants XVIII, Inc. (Included
                          as Exhibit 10.5 to Form 10-Q filed with the Securities
                          and  Exchange  Commission  on  August  14,  2002,  and
                          incorporated herein by reference.)

               31.1       Certification of Chief Executive  Officer of Corporate
                          General  Partner  Pursuant  to Rule  13a-14 as Adopted
                          Pursuant to Section 302 of the  Sarbanes-Oxley  Act of
                          2002. (Filed herewith.)
<PAGE>

               31.2       Certification of Chief Financial  Officer of Corporate
                          General  Partner  Pursuant  to Rule  13a-14 as Adopted
                          Pursuant to Section 302 of the  Sarbanes-Oxley  Act of
                          2002. (Filed herewith.)

               32.1       Certification of Chief Executive  Officer of Corporate
                          General Partner Pursuant to 18 U.S.C.  Section 1350 as
                          Adopted Pursuant to Section 906 of the  Sarbanes-Oxley
                          Act of 2002. (Filed herewith.)

               32.2       Certification of Chief Financial  Officer of Corporate
                          General Partner Pursuant to 18 U.S.C.  Section 1350 as
                          Adopted Pursuant to Section 906 of the  Sarbanes-Oxley
                          Act of 2002. (Filed herewith.)

         (b)   Reports on Form 8-K

               No  reports  on Form 8-K were  filed  during  the  quarter  ended
               September 30, 2003.

<PAGE>

                                   SIGNATURES


               Pursuant to the  requirements  of the Securities  Exchange Act of
1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

DATED this 10th day of November 2003.


                                             CNL INCOME FUND XI, LTD.

                                             By:   CNL REALTY CORPORATION
                                                   General Partner


                                             By:   /s/ James M. Seneff, Jr.
                                                   -----------------------------
                                                   JAMES M. SENEFF, JR.
                                                   Chief Executive Officer
                                                   (Principal Executive Officer)


                                             By:   /s/ Robert A. Bourne
                                                   -----------------------------
                                                   ROBERT A. BOURNE
                                                   President and Treasurer
                                                   (Principal Financial and
                                                    Accounting Officer)
<PAGE>



                                  EXHIBIT INDEX


Exhibit Number

             (c)  Exhibits

                  3.1        Affidavit and Certificate of Limited Partnership of
                             CNL Income Fund XI, Ltd.  (Included  as Exhibit 3.2
                             to Registration Statement No. 33-43278 on Form S-11
                             and incorporated herein by reference.)

                  4.1        Affidavit and Certificate of Limited Partnership of
                             CNL Income Fund XI, Ltd.  (Included  as Exhibit 3.2
                             to Registration Statement No. 33-43278 on Form S-11
                             and incorporated herein by reference.)

                  4.2        Amended   and   Restated   Agreement   of   Limited
                             Partnership  of CNL Income Fund XI, Ltd.  (Included
                             as  Exhibit   4.2  to  Form  10-K  filed  with  the
                             Securities  and  Exchange  Commission  on April 15,
                             1993, and incorporated herein by reference.)

                  10.1       Management  Agreement  between  CNL Income Fund XI,
                             Ltd.  and  CNL  Investment   Company  (Included  as
                             Exhibit 10.1 to Form 10-K filed with the Securities
                             and  Exchange  Commission  on April 15,  1993,  and
                             incorporated herein by reference.)

                  10.2       Assignment   of  Management   Agreement   from  CNL
                             Investment  Company  to  CNL  Fund  Advisors,  Inc.
                             (Included  as Exhibit  10.2 to Form 10-K filed with
                             the Securities and Exchange Commission on March 30,
                             1995, and incorporated herein by reference.)

                  10.3       Assignment of Management  Agreement from CNL Income
                             Fund  Advisors,  Inc.  to CNL Fund  Advisors,  Inc.
                             (Included  as Exhibit  10.3 to Form 10-K filed with
                             the Securities and Exchange  Commission on April 1,
                             1996, and incorporated herein by reference.)

                  10.4       Assignment  of Management  Agreement  from CNL Fund
                             Advisors, Inc. to CNL APF Partners, LP (Included as
                             Exhibit 10.4 to Form 10-Q filed with the Securities
                             and Exchange  Commission  on August 14,  2001,  and
                             incorporated herein by reference.)

                  10.5       Assignment  of  Management  Agreement  from CNL APF
                             Partners,   LP  to  CNL  Restaurants   XVIII,  Inc.
                             (Included  as Exhibit  10.5 to Form 10-Q filed with
                             the  Securities  and Exchange  Commission on August
                             14, 2002, and incorporated herein by reference.)

                  31.1       Certification   of  Chief   Executive   Officer  of
                             Corporate  General Partner  Pursuant to Rule 13a-14
                             as  Adopted   Pursuant   to  Section   302  of  the
                             Sarbanes-Oxley Act of 2002. (Filed herewith.)

                  31.2       Certification   of  Chief   Financial   Officer  of
                             Corporate  General Partner  Pursuant to Rule 13a-14
                             as  Adopted   Pursuant   to  Section   302  of  the
                             Sarbanes-Oxley Act of 2002. (Filed herewith.)
<PAGE>

                  32.1       Certification   of  Chief   Executive   Officer  of
                             Corporate  General  Partner  Pursuant  to 18 U.S.C.
                             Section 1350 as Adopted  Pursuant to Section 906 of
                             the Sarbanes-Oxley Act of 2002. (Filed herewith.)

                  32.2       Certification   of  Chief   Financial   Officer  of
                             Corporate  General  Partner  Pursuant  to 18 U.S.C.
                             Section 1350 as Adopted  Pursuant to Section 906 of
                             the Sarbanes-Oxley Act of 2002. (Filed herewith.)
<PAGE>

                                                   EXHIBIT 31.1

<PAGE>


                                                   EXHIBIT 31.2
<PAGE>


                                                   EXHIBIT 32.1
<PAGE>


                                                   EXHIBIT 32.2